Harvey Automobiles Uses a Standard Part in the Manufacture of Several

question 124

Multiple Choice

Harvey Automobiles uses a standard part in the manufacture of several of its trucks.The cost of producing 40,000 parts is $120,000,which includes fixed costs of $60,000 and variable costs of $60,000.The company can buy the part from an outside supplier for $3.00 per unit,and avoid 30% of the fixed costs.
If Harvey Automobiles makes the part,how much will its operating income be?

• A)$42,000 greater than if the company bought the part
• B)$42,000 less than if the company bought the part
• C)$78,000 greater than if the company bought the part
• D)$78,000 less than if the company bought the part

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Hospital Insurance

Coverage typically part of health insurance policies, paying for hospitalization, surgeries, and related medical expenses.

Hourly Rates

The cost or wage set for one hour of work or service.

Time and a Half

A rate of pay that is 1.5 times the employee's normal wage, typically paid for overtime or holiday work.

Time and a Half

A pay rate that is 1.5 times the employee's standard hourly rate, typically used for overtime work.